DAVOS Jan 23 Russia's biggest bank Sberbank
plans to diversify its investment banking business
abroad while the country tries to fix its slowing economy, an
executive board member of the bank told Reuters.
Russia last autumn slashed its forecast of long-term growth
to 2.5 percent a year from 4 percent, lagging the global
economy, while the number two official at the central bank,
Ksenia Yudayeva, has said Russia is stuck in "stagflation".
Earlier this month, the Organisation for Economic
Cooperation and Development told Russia to tackle its poor
business climate to reverse the slowdown which was being
compounded by structural problems.
"In Russia we need a new growth paradigm," Alexander
Bazarov, a member of the executive board and senior vice
president at Sberbank, told Reuters in an interview during the
World Economic Forum in Davos.
"This search will take time - and it will take even more
time to implement it in real life," Bazarov said. He said Europe
was starting to wake up and that would have an impact on
investment banking activity.
Bazarov, who is deputy head of investment banking unit
Sberbank CIB, also identified Turkey as a promising growth
To reduce its reliance on the Russian home market, Sberbank
has already extended its reach into Eastern Europe and Turkey
with the acquisitions of Vienna-based Volksbank AG and Turkey's
"Ideally, we would hope that Turkey and Europe bring
Sberbank as much business as we make in Russia now," Bazarov
said. Sberbank CIB earned net profits of $280 million in Russia
Sberbank has made a five-year plan to double its assets and
profits, targeting annual growth in business lending of 15
percent and 18 percent in consumer lending. It wants to achieve
a return on equity of 18 percent.
In Russia, Bazarov said he expected a round of defensive M&A
activity that will lead to consolidation in the metallurgical
and mining sectors.
"These will have a forced character to the extent that the
sector is experiencing difficulties," he said, adding that he
expected consolidation in the financial sector. "If as a result
one or more large private banks emerges that would be good."